Small Business

Single Vendor vs Multi-Vendor: Which Marketplace Model is Better?

E-commerce is booming; it has been since it first arrived in the market. Also, with the constant evolution of technology, the concept of e-commerce marketplaces had come a long way from when it first became a widely accepted form of shopping. From being a rather simple way of finding products on barely put-together websites, online marketplaces today serve as a means to streamline production, prevent overstocking, and generally improve the supply chain management process. However, as mentioned above, the concept has evolved and divided the market into two options: Single-vendor marketplaces and multi-vendor marketplaces.

To the layman, this may come across as a trivial detail, but we can’t stress enough how important this distinction is. It is equally important to decide which model you will use for your business. Also, it can be quite challenging to choose between the two options at hand, owing to their popularity in the market and the advantages each one offers for a broad spectrum of business owners. However, a choice must be made nonetheless, so here’s a quick guide to help you do just that.

1. Differences

Single-vendor marketplace

A single-vendor marketplace hosts only one seller that caters to customers.

Given that this model includes only one seller, the variety of products on offer gets automatically rendered severely limited.

Multi-vendor marketplace

A multi-vendor marketplace is a digital store that hosts several sellers, all of whom sell to the customers that visit the market.

Since there are several vendors involved, the customers have access to a significantly better variety of products.

2. Benefits

Single-vendor marketplace

Because only one seller is catering to all customers, the business is saved from the time-consuming process of establishing and then maintaining an association with multiple vendors.

The presence of only one vendor also makes it set up and optimize the different systems involved in running an e-commerce business.

Multi-vendor marketplace

The business is not subjected to the risk of crumbling even if one supplier decides to part ways with the marketplace since several suppliers are selling their offerings in the market.

When an e-commerce marketplace has access to a wide range of suppliers with whom it can adapt the volumes of orders, it becomes that much simpler to contend with any fluctuations in demand, including the unforeseen ones.

Having multiple vendors on the marketplace also delivers another crucial advantage: The competition within the vendors on the platform can be used to provide better and high-quality offerings to customers and that too at highly attractive rates. It is also a win for the company since the higher the number of customers, the better the business it results in.

As mentioned above, the choice between the two models is subjective, decided by factors that are typically unique to every business. However, if you were to ask experts in the market, they too would advise that you go with a multi-vendor online marketplace solution because it doesn’t have too many drawbacks, if at all, and the benefits fit offers are far too compelling as compared to that of a single-vendor marketplace.

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A professional and security-oriented programmer having more than 6 years of experience in designing, implementing, testing and supporting mobile apps developed. Being techno geek, I love to read & share about the latest updates in technology including but not limited to IoTs, AI, application development, etc. In my free time, I like to play football, watch movies and explore new places.I have been learning mobile app development since 2012. With having a good understanding of programming languages, I develop native as well as web apps for both iOS & Android using latest tools & technologies. I am also having experience in both front-end & back-end development.

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